Why is this happening? Marcel Schwantes, keynote speaker, and leadership coach for Leadership From the Core, wrote an article for Inc. outlining why company DEI efforts are failing and ways to get them back on track. Marcel offered the following:
- Leaders need to gain more confidence in their current DEI programs. Leaders’ satisfaction with their DEI programs has dropped by 18% in the last two years; so either the program quality needs to be improved, or leaders have too high expectations. Tip: DEI commitments need executive-level buy-in.
- Ineffective leadership is driving diversity out the door. As many as 40% of women and minorities feel they must leave their current company to advance in their careers — a leadership fault. Tip: Leaders must build trust with their employees and create a more robust leadership culture built on inclusion.
- Leaders are too focused on returning to the office. Women and minorities working remotely feel a sense of inclusion, while those working in the office are less likely to feel that way. Tip: Companies should focus on treating leaders as whole people and creating a trusting culture that enables leaders to work flexibly around their outside obligations.
- Diverse talent is suffering from burnout faster than other employees. Most minority employees feel “used up” at the end of every workday, which may result from personal circumstances. Tip: Managers should address challenges by setting a good example, demonstrating vulnerability, and treating young leaders empathetically.
- DEI initiatives are often seen as nonessential and are the first to be cut. Diverse companies perform better financially and retain better talent. Tip: Organizations can keep their DEI programs alive by encouraging leaders to be more compassionate, transparent, and authentic in their interactions with employees and proactively recruiting high-potential talent from diverse backgrounds.
Marcel’s main point: genuine DEI requires fostering better organizational leadership that builds trust and integrates inclusion into daily operations rather than treating it as a standalone strategy.
At Diversitas, our mission is to give those who are underrepresented in the financial planning profession a better understanding of the great opportunities in the industry, as well as a platform to have thoughtful discussions about how we can build a more inclusive future.
The wealth management sector may be less affected by current layoffs in other industries, but it’s essential to stand firm in our DEI efforts, no matter the economic climate.
There are many takeaways from this article for wealth management firm leaders. If you’re failing to attract and retain diverse talent, it’s up to you as leaders to introspectively look at where your policies are failing and how you can adjust your culture to be more inclusive. If you wish to serve many communities in the future, you must take action now to ensure you have the staff to serve them. Just be careful not to tokenize your diverse employees. By offering opportunities for growth and education, as well as flexibility in the workplace, you can easily improve your DEI efforts.
If you are a financial professional who is seeking employment, make sure you ask diversity focused questions during your interviews to get a better understanding of the firm’s DEI policy. Finding the right employer whose values align with your own can help avoid feelings of burnout later on.
There is a strong desire from diverse clients to have their finances managed by advisors with cultural competency. The financial services industry has no room to let up on its efforts to attract diverse talent and cater to its increasingly diverse client base.
To read the full Inc. article, click here. For more information about how to set DEI goals in wealth management, check out our blog post here.